Part 1 of this series examined the legal framework underlying OFAC’s new Venezuela general licenses—General License 46B, GL 51B, and GL 52—and the Foreign Government Deposit Fund payment mechanism that sits at the center of the authorized transaction structure. Part 2 turns to the practical compliance program question: what does a company actually need to build to execute Venezuela-related transactions safely, accurately, and in a manner that will withstand regulatory scrutiny?

The short answer is that the new Venezuela general license framework requires a purpose-built compliance architecture—not an adaptation of existing OFAC screening procedures. The conditions imposed by the applicable authorizations go well beyond standard sanctions screening and demand integrated program elements spanning legal review, counterparty diligence, contract structure, payment procedures, reporting systems, and recordkeeping. Companies that approach Venezuela-related transactions without this architecture in place are taking risk that the authorizations themselves do not permit.

Step One: Transaction Scoping—Identify the Right Authorization Before Anything Else

The first and most critical step in any Venezuela-related transaction review is confirming which authorization applies. GL 46B, GL 51B, and GL 52 have overlapping but distinct scopes. A transaction may implicate multiple general licenses simultaneously. Before commercial negotiations advance, before term sheets are exchanged, and certainly before any contractual commitments are made, legal and compliance personnel must confirm that the contemplated transaction falls within the scope of an applicable authorization and that all threshold conditions—including the established U.S. entity requirement—are satisfied.

The established U.S. entity requirement deserves particular attention. The authorization is not available to entities formed after January 29, 2025, regardless of U.S. incorporation. Companies should confirm their formation date at the outset of any transaction analysis and should not assume availability simply because they are U.S.-incorporated.

Transaction scoping is not a one-time exercise. Because Venezuela sanctions authorities remain subject to amendment, replacement, suspension, or revocation at any time, the applicable authorization must be revalidated at each critical stage of the transaction lifecycle: before execution of definitive agreements, before vessel nomination, before cargo loading, before payment, and before any material amendment to the transaction structure. A general license that was available when negotiations began may be modified or revoked before closing. Regulatory revalidation must be built into the transaction timeline as a formal checkpoint, not an afterthought.

Step Two: Counterparty Due Diligence—Screening Is Necessary but Not Sufficient

Standard OFAC sanctions screening against commercially available databases is necessary but not sufficient for Venezuela-related transactions. The jurisdictional restrictions embedded in GL 46B, GL 51B, and GL 52—excluding transactions involving Russia, Iran, Cuba, North Korea, and China-connected entities—are triggered by ownership and control structures, not just direct SDN designations. A counterparty that does not appear on the SDN List may nonetheless be ineligible because it is owned or controlled by a Russian or Chinese person, or because it is party to a joint venture arrangement with such persons.

Effective counterparty due diligence for Venezuela-related transactions requires:

• Full beneficial ownership analysis tracing ownership structures to identify any Russian, Iranian, Cuban, North Korean, or PRC connections that could affect authorization availability.
• Review of all transaction participants—not just the immediate contractual counterparty—including suppliers, intermediaries, vessel owners, vessel operators, charterers, insurers, brokers, port operators, terminal operators, and financial institutions.
• Vessel-specific diligence confirming that no blocked vessel participates in the transaction. GL 52 and GL 46B do not authorize transactions involving blocked vessels, and vessel eligibility must be confirmed independently.
• Written sanctions certifications and corporate documentation from key counterparties, including ownership charts, beneficial ownership information, and representations regarding the absence of prohibited jurisdictional connections.
• Re-screening at critical transaction lifecycle stages: before execution of definitive agreements, before cargo loading, before payment, and before any material amendment to the structure.

All diligence materials—screening reports, ownership analyses, vessel reviews, certifications, and supporting records—must be retained as part of the transaction compliance file. These records are essential for demonstrating reasonable care in the event of a regulatory inquiry.

Step Three: Contract Structure—Mandatory Provisions Are Not Negotiable

The applicable general licenses impose express contractual requirements that are conditions of the authorization, not recommended provisions. Any contract with PdVSA, the Government of Venezuela, or PdVSA-owned entities must: (i) be governed by the laws of the United States or a U.S. jurisdiction, and (ii) provide for dispute resolution in the United States, the United Kingdom, France, or Singapore. Companies using existing contractual templates that contemplate foreign governing law or non-U.S. arbitration venues must modify those templates before relying on the general license authorization.

Beyond the mandatory provisions, contracts should incorporate:

• Sanctions representations and warranties confirming that counterparties are not sanctioned, are not owned by sanctioned persons, are not acting on behalf of blocked persons, and maintain no prohibited jurisdictional connections.
• Affirmative compliance covenants requiring prompt notification of any sanctions designation, ownership change, or other development that could affect the transaction or the authorization’s availability.
• Information rights and audit provisions permitting requests for updated ownership information, sourcing documentation, shipping records, and compliance certifications throughout the transaction lifecycle.
• FGDF payment mechanics provisions expressly acknowledging that payments may be routed through U.S. government-designated accounts and allocating responsibility for assembling required documentation.
• Robust suspension and termination rights permitting performance suspension or agreement termination if a counterparty becomes sanctioned, ownership changes create concerns, or the applicable authorization is amended or revoked.

Step Four: FGDF Payment Procedures—Build the Process Before You Need It

Companies that wait until a payment is due to begin the FGDF process will face delays, potential contractual defaults, and compliance risk. The FGDF framework requires advance preparation, and companies should implement formal internal payment procedures before the first Venezuela-related transaction closes.

The FGDF payment workflow should include:

• Pre-payment legal and compliance review confirming the applicable authorization, the identity of the counterparty receiving economic benefit, whether FGDF applies, and that all conditions of the applicable GL have been satisfied. No payment should be released without documented legal and compliance approval.
• A standardized FGDF submission package containing: a transaction summary describing the nature of the transaction and applicable authorization, executed contracts, invoices, purchase orders, product specifications, quantity and pricing information, sanctions screening documentation, and internal approvals.
• Advance contact with [email protected] well before the anticipated payment date to request payment account information and submit required transaction documentation.
• Finance-level review of received payment instructions to confirm that designated account information corresponds to the approved transaction before any funds are transmitted.
• Post-payment file maintenance containing all correspondence with U.S. authorities, payment instructions, proof of payment, banking records, invoices, contracts, and internal approvals.

Commercial personnel must understand that the FGDF process introduces additional lead time into payment mechanics. Payment timelines negotiated in contracts must account for the time required to obtain government payment instructions and compile supporting documentation. Committing to payment timelines that assume ordinary commercial wire transfer mechanics is a recipe for default and compliance failure.

Step Five: Reporting—Assign Responsibility and Track Deadlines

The reporting obligations in GL 46B, GL 51B, and GL 52 are triggered by specific transaction events and are subject to hard deadlines that cannot be missed. Companies should:

• Identify at the outset of each transaction whether reporting obligations will arise and which personnel are responsible for preparing, reviewing, and submitting required reports.
• Establish a centralized transaction compliance file collecting all information required for reporting—party identities, transaction dates, product descriptions, quantities, values, countries of destination, and payments to Venezuelan governmental entities—on a contemporaneous basis throughout the transaction lifecycle.
• Implement deadline tracking for initial reports (due ten days after the first qualifying transaction under all applicable GLs) and periodic supplemental reports (every ninety days under GL 52; every thirty days under GL 51B).
• Retain copies of all submissions and supporting documentation as part of the transaction compliance file.

A compliance failure in reporting is a separate enforcement exposure independent of the underlying transaction’s authorization status. The structure of the reporting obligation means that compliance personnel must be engaged before the first transaction closes, not after.

The Bottom Line: Venezuela Is Open—But the Conditions Are Real

The new Venezuela general license framework creates genuine commercial opportunities for established U.S. entities in energy, petrochemicals, and minerals. The authorizations are broad, and the categories of permitted activity are significant. But the conditions are real, operational, and demanding. Companies that approach Venezuela-related transactions without purpose-built compliance architecture—covering transaction scoping, counterparty diligence, contract structure, FGDF payment procedures, reporting, and recordkeeping—are not taking advantage of the authorization. They are operating outside it.

The compliance investment required to execute within these general licenses is substantial. But given the sanctions exposure associated with unauthorized transactions involving the Government of Venezuela and PdVSA—and the reputational and legal consequences of enforcement action—that investment is not optional. The authorizations are the path. Building the compliance infrastructure to walk that path safely is the work.